Two quick bomb blasts claiming over 100 people in Abuja and an unprecedented hostage taking of over 250 young girls in Borno state, all coming on the heels of the World Economic Forum slated for Abuja, were more than what was needed for foreign investors to abandon the global event. At least, such were the thoughts of the insurgents operating as a pressure group against the government of Nigeria. In this report, CHIBISI OHAKAH examines some of the assuring developments from the past WEF held in Abuja
Going by the risen impetus from the Nigerian insurgents in the few days before the World Economic Forum which held in Abuja, there were serious concerns by the business community in Nigeria and indeed Africa that the fate of the global even maybe hanging on the balance.
So, while Nigerian business community and their allies from across the globe congratulated each other for a successful meeting, the managing director and member of WEF, Philipp Rosler, presented an answer during the closing ceremony. “We will not allow terrorists to dictate the African people’s agenda. And that was maybe the main message from this World Economic Forum. We have beautiful projects and there is an ongoing project to make all these projects of immense benefit to the people of Africa.”
It was clear therefore that the feeling of Philipp informed the confidence and courage of the investors from all around the world. In their report before the WEF took off, The McKinsey Global Institute ‘warned’ that while Nigeria, Africa’s largest economy, seems faced the overwhelming burden of Boko Haram insurgency, the violent terrorist group causing havoc across the country’s North East area, the abundance of economic opportunities in the country should not be ignored.
In an effort to build the confidence of participants coming to WEF, the Institute stated that Nigeria’s tale is of contrasting fortunes – a coin with two different features on either side. “While one side of the coin – largely discussed in the public domain – presents an inhabitable environment, following the spat of violence perpetrated by the dreaded terror group coupled with a huge gulf in income status with 43% of the Nigeria’s 174 million people still living below the poverty line, the other less-talked-about side showcases the vast potentials embedded in the fragments of a rapidly growing economy.”
McKinsey report themed: ‘Nigeria’s Renewal: Delivery Inclusive Growth in Africa’s Largest Economy,’ recorded that while recent global attention has focused on violent unrest in certain areas of the country, less has been written about the significant economic progress that has been made in recent years. Confronted by massive literature (like the McKinsey report) on Nigeria, including the MINT economic categorisation, which heightened world interest in Nigeria,the attraction for typical investors from around the world was huge.
Under a term coined by world acclaimed economist, Jim O’Neill, identified the “MINT” countries – Mexico, Indonesia, Nigeria and Turkey – as emerging economic giants.Nigeria is one of the fastest growing economies in Africa (and globally), with an average growth rate of 7%. It also boasts an increasingly dominant financial market, with market capitalization exceeding N13.23 trillion ($82.8 billion) this year, which makes it one of the 10 fastest growing equity markets globally – the only other African market drafted in the list is Zambia.
Also, the Nigeria’s foreign investment portfolio stock as at last count stood at $85 billion, a figure that negates public notion that international investor interest in Nigeria might be dampened, as these positives where recorded under a period with constant publicity on security challenges and the poverty levels in the country.
If the foreign investors insisted on coming to WEF despite the bombs and kidnappings in Nigeria, it is because Nigeria is adjudged Africa’s largest economy following a GDP rebase last month, which saw it outpace South Africa with its $510 billion GDP. More importantly, the rebasing process revealed that the country’s economy is now diversified, leaving its oil-dependent past, with sectors like telecommunication and manufacturing contributing larger percentages to growth than oil.
Gradually Nigeria is losing the image of a strictly petro-economy. Over 86% of the GDP now comes from activity outside the oil resources sector. Today, telecommunication and ICT contributed 10.4%to GDP while manufacturing and trade contributed 14.3% and 20.1% respectively. This does not however discount the fact that Nigeria still relies heavily on oil revenues.
Analysts around the world have noted and written that trade, manufacturing, infrastructure and agriculture are key sectors driving Nigerian economic growth and development. These four sectors contributed a combined 59.2% to GDP growth between 2012 and 2013. These facts are known for Nigeria across the globe
All four key sectors are expected to contribute as much as $800 billion by 2030 – more than the current GDP figures, and more than double the current combined output of $251 billion. The selected industrieswill be among the most important in driving GDP and productivity and contributing to inclusive growth in Nigeria in the years to come.
Records show that Nigeria’sconsuming class is sparking a simultaneous growth in total consumption; predicted to reach a high of $1 trillion. This consuming class could grow to 160 million in 2030 in a population of 273 million – more consumers than the current populations of France and Germany combined.
Before the commencement of the WEF, investors around the world knew that Nigeria is a prime destination for manufacturing-focused international businesses, as they are certain to enjoy a huge return on sales by investing in a soon-to-explode economy.
Retail chains have started to cash in on the rising middle class. For instance, South Africa’ retail giants – Shoprite, Mr Price, Foschini and Game – have already started reaping from the spending power of the huge Nigerian consumer class, evidence by the large population of over 170 million.
Today, most of the economic positives in Nigeria have largely been driven by the private sector, with the government arguably taking a more supervisory role, implementing and monitoring enabling policies.
The government has put forward policies capable of diversifying the economy. For instance, there is the Automotive Policy, which is boosting local production and encouraging domestic purchase. There is the Sugar Master Plan, launched to raise production and boost manufacturing of sugar, and the Nigerian Local Content Policy, which requires all foreign oil industry operators to allocate a percentage of their operations to local companies, focused on delivering improved economic and social conditions for the Nigerians.
WEF managing director, Philipp RoslerRosler,described this year’s edition of WEF as very successful, informing that there we 48,000 articles written about this year’s forum, which was more than three times the 16,000 articles written during last year’s conference in South Africa. So there is a huge interest. Africa is very important to global economic growth.”
Besides the financial commitments made for the continent, he also stated that there were many projects announced that would lead to very positive change for people in the continent.
“We had a community of purpose, to put all the money together which was committed in this three days by the Chinese govt and others would amount to $68billion over the next few years for Africa for the African people for specific projects, like skills, infrastructure, energy healthcare and very importantly to the safe our schools initiatives.
“It is not only money. There projects for the people of Africa, and we are not only here to talk about the problems we want to change something.”
Rosler also noted that 1000 participants were at the conference, an indication that there was a huge solidarity for Nigeria from around the world